What is each projects internal rate of return

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The Bolster Company is considering two mutually exclusive projects:

Year                        Project A             Project B

0                         -$100,000            -$100,000

1                             31,250                0

2                            31,250                   0

3                              31,250                 0

4                             31,250                  0

5                              31,250                200,000

The required rate of return on these projects is 12 percent.

Question a. What is each project's payback period?

Question b. What is each project's net present value?

Question c. What is each project's internal rate of return? Fully explain the results of your analysis. Which project do you prefer, and why?

Reference no: EM132495319

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